What is title insurance and why do I need it when I buy a home?

When you purchase a home, you are given a title to the property, giving you full legal ownership.  However, there could be possible hidden defects, risks, or flaws that may affect your title to the property.  Some of these include unsatisfied claims, clerical errors, forgeries,and tax or water/sewer assessments.   Title insurance is basically protection against a loss if a problem or defect is found in a property title.

There are two types of title insurance issued when you purchase a property.  If you are financing your home, you will be required to purchase a loan policy, which covers the outstanding balance on the mortgage for the lender, but doesn’t cover the owner.  The second type is an owner’s policy, which insures the owner of the property.  The premium you pay is only once, when the title is transferred from the property’s prior owner, and the policy remains in effect for as long at you retain ownership in the property.

If you have any questions regarding title insurance, please feel free to contact one of our lenders at Intercity State Bank.



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